Archive for Tuesday, July 12, 2011

4 plead guilty in large mortgage fraud scheme

July 12, 2011


— Four Kansas men have pleaded guilty to conspiring to fraudulently obtain millions of dollar in mortgage loans.

U.S. Attorney Barry Grissom said Tuesday that the four men are 55-year-old Paul Hartfield; 42-year-old Briand D. Jaimes; and 53-year-old John T. Bradfield, all of Overland Park; and 42-year-old Kevin M. Mahoney of Stilwell.

Hartfield owned Hart Investments and Diamond Mortgage. The other three men worked at Diamond Mortgage.

Prosecutors say Hartfield obtained $4.9 million in loans to rehabilitate more than 40 homes in the Kansas City metro area. He stopped rehabilitating the homes in October 2006 and made false claims to lenders. He recruited friends and family to buy properties he had claimed to fix, using fraudulent financial information.

All the men are scheduled to be sentenced in October.


kernal 6 years, 10 months ago

Surely the properties were collateral for the loans, so why didn't the lender(s) do inspections and disburse funds as the work progressed?

ljwhirled 6 years, 10 months ago

Because the lenders simply sold the loans off to third party banks (Lehman, Goldman Sachs, Bank of America).

The third party banks got Moodey's/Standard& Poor to rate the loans AAA and then got them guaranteed by the Federal Government in the guise of Fannie Mae and Freddie Mac.

The banks then sold the securities to investment funds as AAA bonds.

When the borrowers couldn't pay? Who cares! The Taxpayers end up paying!!!

Despite BILLIONS of dollars in bonuses paid under false pretenses, not a single person at Moody's, Standard & Poor, Bank of America, Goldman Sachs, or any other major bank is going to jail.

Never mind going to jail. Not a single one has had to pay back any of the BILLIONS in bonuses paid. They didn't do their job, we pay the price, they take the bonuses home to the bank.

riverdrifter 6 years, 10 months ago

Thanks, Whirled. It's the Wall Street Republican business mode.

ljwhirled 6 years, 10 months ago

Yeah, I know. What we really need is less regulation.

If only the feds had been watching LESS closely we would all be better off.

I tell you, less regulation would make the entire system work better. You bettcha!

kernal 6 years, 10 months ago

Since when do banks sell real estate loans before the project is finished? It's not like a residential rehab would be a joint venture.

ljwhirled 6 years, 10 months ago

Guarantee these were sold as soon as the ink was dry.

See - Federally Backed.

The Banks aren't out a dime. Why check the paperwork when your Uncle Sam will step in and take the loss?

ljwhirled 6 years, 10 months ago

Worse yet.

Because they were so eager to give away these Federally backed loans and get huge bonuses, now they have completely over-reacted and are hardly lending at all.

I have a credit score of 750 a job I've had for 6 years.

I recently applied for a $95,000 loan on a property appraised at $132,500.

I ALREADY have a 15 year loan with Bank of America for these funds, the payment is $1,350/Mo (5.125% Rate)

I want to re-finance it down to a 30 year (new payment $950/Mo), 4.125% interest rate.

DENIED. Not enough proof of income (despite W2, Tax Statement, Company Affidavit)

Huh? I already owe them the money.

I've been paying on it for 7 years and never missed a payment (never late).


Seriously? No wonder the housing market is a mess. No one can borrow.

Free markets, indeed. Between these yahoos and congress, we'll all be living in a tent before long.

kernal 6 years, 10 months ago

$950 PITI for a $95,000 mortgage at 4.125%?

ljwhirled 6 years, 10 months ago

Yes. Taxes & insurance add up. Note is is Oklahoma.

kernal 6 years, 10 months ago

Okay, I was computing it at Lawrence tax and insurance rates.

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